Europe takes UK to court over benefits

Britain is being taken to court by the European Commission over its “right to
reside” test

The European Commission said it was bringing its legal case because the “right to reside” test is discriminatory since British citizens do not have to pass itPhoto: ALAMY

By Robert Mednick, Chief reporter

9:31PM GMT 22 Mar 2014

The European Commission is to take Britain to court over its attempts to limit benefits payments to migrants in a “politically explosive” case ahead of the European elections.

it was unclear whether the commission had planned to go ahead with the legal action, which centres on the “right to reside” test that European Union migrants must pass before they can claim benefits in this country.

However, The Sunday Telegraph has now been told that the lawsuit will be lodged “shortly” in the European Court of Justice.

With European elections held in Britain on May 22, the timing of the lawsuit, over such an emotive issue, threatens to be incendiary.

Anger over the lawsuit will be compounded by the admission that Britain will give an extra £800 million to the EU budget this year because this country’s economy is outperforming other member states.

The European Commission said it was bringing its legal case because the “right to reside” test is discriminatory since British citizens do not have to pass it.

The test, first introduced by Labour to try to calm fears of so-called “benefits tourists” coming to the UK, requires migrants from other EU states to prove they are seeking work before they can claim benefits such as Jobseeker’s Allowance.

If Britain loses the case it will either have to change the law or face multi-million pound fines for non-compliance with EU rules.

The action is being brought by the office of Laszlo Andor, a Hungarian socialist and European commissioner in charge of employment and social affairs.

A spokesman for his office said the legal action would probably be lodged “shortly”.

“We expect the referral to the court to happen within the next three months,” the spokesman said.

“UK nationals have a 'right to reside’ in the UK solely on the basis of their UK citizenship, whereas other EU nationals have to meet additional conditions in order to pass this 'right to reside’ test.

“This means that the UK discriminates unfairly against nationals from other member states.

“This contravenes EU rules on the coordination of social security systems which outlaw direct and indirect discrimination in the field of access to social security benefits.”

The UK Independence Party is likely use the coming lawsuit in its European election campaign by urging voters that only by pulling out of the EU can Britain regain control of its welfare budget.

The court case was prompted by a series of complaints taken to the commission by EU migrants who have been refused benefits.

It is not clear how many were turned down because the Department for Work and Pensions does not have overall figures. The commission believes several thousand people are involved and the case could lead to future payments worth hundreds of millions of pounds.

Britain is reckoned to have one of Europe’s most generous welfare systems, not least because in many countries, benefits are contributions based. But here many benefits — including those at the centre of the case such as child benefit, child tax credit and Jobseeker’s Allowance — are means-tested. In other words migrants do not need to have made National Insurance payments before receiving welfare.

Experts believe the timing is “politically explosive”. Stephen Booth, from Open Europe, a think tank which calls for widespread EU reform, said: “Free movement of workers has been beneficial to both the UK and Europe, but the European Commission should not be seeking to weaken the protection of national welfare systems.”

Syed Kamall, leader of the Tory MEPs, questioned the timing of the lawsuit, which was first mooted last May. He challenged Mr Andor to explain the delay. “One possibility is that he is not sure of his case – and our government has consistently said it is quite sure of its own legal ground,” Mr Kamall said.

“Another is that he is prepared to time the prosecution in a way which most of us in the UK would see as provocative.”

The UK Independence Party said the case showed why voters should switch in May.

Paul Nuttall, Ukip’s deputy leader, said: “The only way we can properly safeguard British taxpayers’ money is by leaving the EU.”

The DWP has introduced a series of measures to strengthen the right to reside test. In January, it ordered EU migrants to wait three months before claiming Jobseeker’s Allowance and added “more individually tailored questions” to a verbal test that migrants must pass.

From April 1, new migrant jobseekers will no longer be able to claim housing benefit.

Those new rules fall outside Mr Andor’s case. They will likely be subject to a separate challenge.

Iain Duncan Smith, the Work and Pensions Secretary, said the public was right to be concerned that migrants should contribute to the country. “Our rules are in line with EU law and we will defend them robustly,” he added.

The admission that Britain’s contributions to the EU budget will rise by £800 million this year to £8.1 billion has angered Conservative Eurosceptics.

It was contained in a report published last week by the Office for Budget Responsibility.

EU contributions are calculated in part according to national income and Britain’s higher than expected growth led to a significant rise in its share.

One senior Tory MP said the figures strengthened the case for leaving the EU. “The more we pay in, the deeper we become integrated,” said Bill Cash, chairman of the European scrutiny committee. “We can’t carry on like this … The more we pay in the less we get out.”